ChargePoint Holdings, Inc. (NYSE: CHPT), a leading provider of electric vehicle (EV) charging infrastructure, reported annual revenue of $417.1 million for the fiscal year ended January 31, 2025, representing a decrease of 17.7% from the $506.6 million reported in the previous year.

The Campbell, California-based company posted a net loss of $277.1 million for fiscal 2025, compared to a net loss of $457.6 million in fiscal 2024, showing a significant improvement in its bottom line despite lower revenue. ChargePoint reported a gross profit of $100.7 million and gross margin of 24.1%, up from a gross profit of $30.1 million and gross margin of 5.9% in the prior year.

“We’ve made substantial progress in optimizing our operations while continuing to advance our technology and service offerings in a rapidly evolving EV market,” said Rick Wilmer, Chief Executive Officer of ChargePoint, when the company announced preliminary results earlier this month.

Financial Performance

ChargePoint’s revenue mix showed a shift in its business model, with networked charging systems revenue decreasing 34.9% to $234.8 million, representing 56.3% of total revenue, compared to 71.2% in the previous year. Meanwhile, subscriptions revenue grew by 19.8% to $144.3 million, accounting for 34.6% of total revenue, up from 23.8% in fiscal 2024. Other revenue, which includes charging-related fees and transaction fees, increased 49.6% to $38.0 million.

Operating expenses decreased significantly to $353.7 million from $480.1 million in the prior year, primarily due to the implementation of multiple reorganizations throughout the fiscal year. Research and development expenses decreased by 36.0% to $141.3 million, sales and marketing expenses decreased by 12.8% to $130.9 million, and general and administrative expenses decreased by 25.3% to $81.5 million.

The company ended the fiscal year with cash and cash equivalents of $225.0 million, down from $357.8 million at the end of fiscal 2024. During fiscal 2025, ChargePoint used $146.9 million of cash in operating activities, an improvement from the $328.9 million used in the previous year.

Business Developments

During fiscal 2025, ChargePoint implemented restructuring plans to reduce operating expenses and improve efficiencies. In September 2024, the company reduced its workforce by approximately 15%, following earlier reductions of 12% in January 2024 and 10% in September 2023. These restructuring initiatives incurred costs of $9.8 million in fiscal 2025.

The company continues to maintain a strong network of 342,000 active charging ports under management across North America and Europe, including approximately 33,000 DC fast charging ports. ChargePoint also enables access to more than 1 million charging ports worldwide through its roaming partnerships.

In October 2023, ChargePoint amended the terms of its Convertible Notes, extending the maturity date from April 1, 2027, to April 1, 2028, while increasing the cash interest rate to 7.0% from 3.5% and the PIK interest rate to 8.5% from 5.0%.

For the interest period from April 1 through October 1, 2024, the company elected the option of PIK Interest through the issuance of additional 2028 Convertible Notes of $12.8 million, increasing its debt load but preserving cash in the near term.

ChargePoint is also facing legal challenges with a class action lawsuit filed in November 2023, alleging violations of federal securities laws. The lawsuit claims the company made materially false and misleading statements regarding its handling of supply chain disruptions, revenue reporting, and inventory valuation. Several derivative actions have also been filed against the company’s board of directors and certain former officers.

After the fiscal year-end, on February 19, 2025, ChargePoint received notification from the New York Stock Exchange (NYSE) that it is not in compliance with listing standards due to its average closing stock price falling below $1.00 over a consecutive 30 trading-day period. The company has until August 19, 2025, to regain compliance and is considering various options, including a potential reverse stock split.

Market Position and Strategy

ChargePoint continues to face intense competition in the EV charging market from manufacturers of hardware charging systems and software providers. Despite this, the company maintains its position as a market leader in North America in commercial Level 2 Alternating Current charging.

The company’s strategy includes targeting three key verticals: commercial businesses and charge point operators (CPOs), fleet operators, and residential customers. ChargePoint has been working to increase research and development into innovative EV charging offerings while simultaneously reducing overall R&D expenditures through more efficient allocation of resources.

ChargePoint’s business model focuses on enabling customers to build and operate their own charging networks rather than owning and operating the infrastructure itself. This approach allows the company to allocate capital strategically toward product development and public policy initiatives rather than capital-intensive infrastructure deployment.

“Our comprehensive ecosystem of products and services supports ChargePoint’s mission to accelerate the transition to electric mobility while positioning the Company for both leadership and longevity in the coming years,” the company stated in its annual report.

Industry Outlook

The EV charging infrastructure market continues to evolve, with passenger EV sales expected to increase significantly over the coming decades. According to the Bloomberg New Energy Finance Long-Term Electric Vehicle Outlook 2024 report, passenger EV sales are projected to increase from 2.4% of new vehicles sold in 2020 to 81.1% in 2040 in the United States, and from 12.2% to 84.3% in Europe over the same period.

However, the company noted that macroeconomic factors including inflation, interest rates, and global trade tensions could impact consumer demand for EVs and, consequently, charging infrastructure. Recent U.S. announcements regarding tariffs on goods imported from Canada, Mexico, and China may particularly affect the automotive industry, potentially increasing vehicle costs and slowing EV adoption.

Opinion

ChargePoint’s fiscal 2025 results reveal a company in transition, making difficult but necessary adjustments to navigate a challenging EV charging market. The substantial reduction in operating expenses through multiple reorganizations demonstrates management’s commitment to achieving operational efficiency, which has contributed to narrowing the company’s net loss despite lower revenue.

The shift in revenue mix toward higher-margin subscriptions is a positive development that aligns with the company’s long-term strategy of building recurring revenue streams. This 19.8% growth in subscription revenue suggests that ChargePoint’s installed base continues to expand, even as hardware sales have slowed. This transition could eventually lead to improved financial stability once the company reaches sufficient scale.

However, several concerning factors remain. The 34.9% decline in networked charging systems revenue indicates potential market saturation or increased competition in hardware sales. The company’s cash position has deteriorated significantly, with $132.8 million consumed during the year, raising questions about long-term sustainability without additional financing. With $225 million in remaining cash and a continued cash burn, ChargePoint may need to secure additional funding in the coming fiscal year.

The NYSE compliance issue further complicates the company’s ability to raise capital efficiently, potentially forcing a reverse stock split that, while addressing the immediate listing concern, would not resolve the underlying business challenges. Additionally, the pending legal actions add uncertainty and could divert management attention and financial resources.

ChargePoint’s success ultimately depends on the pace of EV adoption, which has shown signs of uneven growth in different markets. While the company has made commendable progress in right-sizing its operations, its future hinges on whether the EV market accelerates growth and whether ChargePoint can capture a significant share of that growth while maintaining its technological edge against competitors.

The coming fiscal year will be crucial for ChargePoint as it balances further cost optimizations with the need to invest in innovation and market expansion. Investors should closely monitor the company’s cash burn rate, subscription growth, and developments in the broader EV market before drawing conclusions about ChargePoint’s long-term viability in this evolving industry.

News Source: SEC.